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CCISD to oversee BHK crises

$1.2M deficit predicted

October 25, 2012
By SCOTT VIAU - DMG writer ( , The Daily Mining Gazette

HOUGHTON - With the departure of BHK Child Development Board Executive Director Mike Poma and layoffs of seven teachers last week, the Copper Country Intermediate School District has reached an agreement with the BHK board for financial oversight of the struggling agency.

According to CCISD Superintendent Dennis Harbour, the conditions of the offer made to BHK from the CCISD Tuesday evening included that the BHK board will have meetings open to its staff and the public, an issue of concern recently cited by teachers and staff.

The board unanimously accepted the proposal Tuesday, and a public hearing was conducted by the CCISD at BHK Wednesday to explain the agreement to stakeholders.

Article Photos

Scott Viau/Daily Mining Gazette
Copper Country Intermediate School District Superintendent Dennis Harbour, center, addresses a crowd Wednesday at BHK Child Development in Houghton. Behind, from left, are Pat Rozich and Bill Polkinghorne, who will oversee BHK day-to-day operations.

Harbour, who is now overseeing the developments at BHK, told audience members Wednesday he has established two committees - one that will be charged with financial oversight and another that will deal with educational programming. The board, however, will still have the final say on whether to accept the plan of action suggested by the committees.

CCISD Financial Manager Ken Maki and Public Schools of Calumet, Laurium and Keweenaw Superintendent Darryl Pierce will lead the financial committee.

Bill Polkinghorne, retired superintendent of Houghton-Portage Township Schools, and Pat Rozich, retired superintendent of Adams Township Schools, will serve on the programming committee.

While there hasn't been an interim director named yet, Polkinghorne and Rozich will assume the day-to-day responsibilities at BHK.

"We're hoping that within a three-month period we're going to be able to sort this out," Harbour said. "I'm actively always looking for somebody that could be an interim, that could be an executive director here. I have to be assured in my mind that this is somebody who could handle this job before I recommend anybody to this board. We're in pursuit."

Harbour said his goal is to hire an executive director in the next six months.

Rukkila, Negro and Associates has been hired to audit BHK to determine the extent of the deficit. According to early reports, Harbour said, the amount is estimated to be at about $1.2 million across the board, although this amount may change once the audit is complete.

"This is a complicated system here because you have federal and state monies, you have Head Start dollars, you've got grant dollars and it has to be verified by qualified auditors so that we can make decisions on the information we get," Harbour said.

If the audit verifies the same amount, cuts will need to be made to keep BHK afloat, he said. Those cuts may include both programs and faculty. BHK currently employs about 250 full- and part-time staff members, Harbour said.

One concern for the CCISD is last week's layoffs may have pushed BHK into a state of noncompliance with its federal funding, which means BHK could lose that source of income. Harbour said he and others are investigating that issue.

"I don't know if they're out of compliance, but I do know that we're going to evaluate the needs there," he said. "Even if they're not out of compliance, I think we have to look carefully when you start cutting teachers."

According to Harbour, BHK is not in danger of losing its state funding as it is distributed by the CCISD, which receives it from the Great Start Readiness Program.

Harbour said BHK's deficit was caused by poor oversight. However, the deficit does not appear to have been caused by embezzlement, fraud or other improprieties, he said.

"My sense of what it is, is that BHK had grants in 2011 to the tune of $800,000 that were not renewed in 2012 and they kept all those employees," Harbour said. "They didn't reduce staff or reduce expenses, they just kept spending money they didn't have. You just can't do that. The important thing for us is that we have to verify that fact. We can't just guess on it."

In addition to Harbour, Polkinghorne spoke Wednesday to the packed conference room about the crises at BHK.

"We see two things: we see a crisis in finance and we see a crisis in communication," Polkinghorne said. "Our job is to make recommendations to the board on how to fix something that's broken. And we need to do it quickly."

Polkinghorne added that they are there to fix things, not to place blame.

"This is the situation and we need to fix it. We need to fix it now, not in a year," Polkinghorne said. "This needs to be done now or we won't be here in a year."

Neither Polkinghorne nor Rozich will draw a salary for their work at BHK, Harbour said. Both will receive a stipend to offset expenses.

Polkinghorne stressed that anyone with any questions or concerns is free to contact either himself, Harbour or Rozich, especially when someone might be questioning the tough decisions that may need to be made.

"You call here, ask for us," Polkinghorne said. "You will get a call back. You will get an answer. I give you my word."



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